I need help with this accounting project that I have I did the first few transactions and added them to a general ledger but I am having difficulty with the rest. Accounting isn't my major which is why I am not too familiar with some of this stuff. Will pay for help to have this assignment completed. Project information is below.

General Journal Date Account Titles Ref Debit Credit Date Account Titles Ref Debit Credit GENERAL LEDGER CASH Date Explanation No. 101 Ref Debit Credit Balance 2016 ACCOUNTS RECEIVABLE Date 2016 Explanation Ref No. 102 Debit Credit Balance STORE SUPPLIES Date Explanation Ref No. 103 Debit Credit Balance 2016 PREPAID RENT Date Explanation Ref No. 104 Debit Credit Balance 2016 PREPAID INSURANCE Date Explanation Ref No. 105 Debit Credit Balance 2016 INVENTORY - STANDARD BIKES Date Explanation Ref Debit No. 110 Credit Balance 2016 INVENTORY - RACING BIKES Date Explanation Ref No. 111 Debit Credit Balance 2016 INVENTORY - CHILDREN'S BIKES Date Explanation Ref Debit No. 115 Credit Balance 2016 EQUIPMENT Date Explanation Ref No. 120 Debit Credit Balance 2016 ACCUMULATED DEPRECIATION Date Explanation Ref No. 122 Debit Credit Balance 2016 ACCOUNTS PAYABLE Date 2016 Explanation Ref No. 201 Debit Credit Balance UNEARNED SERVICE REVENUE Date Explanation Ref No. 202 Debit Credit Balance 2016 WAGES PAYABLE Date Explanation Ref No. 203 Debit Credit Balance 2016 TAXES PAYABLE Date Explanation Ref No. 205 Debit Credit Balance 2016 INTEREST PAYABLE Date 2016 Explanation Ref No. 210 Debit Credit Balance NOTES PAYABLE Date Explanation Ref No. 220 Debit Credit Balance 2016 CAPITAL STOCK Date Explanation Ref No. 301 Debit Credit Balance 2016 RETAINED EARNINGS Date Explanation Ref No. 310 Debit Credit Balance 2016 DIVIDENDS DECLARED Date Explanation Ref No. 320 Debit Credit Balance 2016 SALES REVENUE Date Explanation Ref No. 401 Debit Credit Balance 2016 SERVICE REVENUE Date Explanation Ref No. 410 Debit Credit Balance 2016 COST OF GOODS SOLD Date 2016 Explanation Ref No. 500 Debit Credit Balance COST OF BIKE SUPPLIES Date Explanation Ref No. 505 Debit Credit Balance 2016 WAGE EXPENSE Date Explanation Ref No. 511 Debit Credit Balance 2016 UTILITIES EXPENSE Date Explanation Ref No. 512 Debit Credit Balance 2016 SELLING EXPENSE Date Explanation Ref No. 513 Debit Credit Balance 2016 ADMINISTRATIVE EXPENSE Date Explanation Ref No. 514 Debit Credit Balance 2016 RENT EXPENSE Date Explanation Ref No. 515 Debit Credit Balance 2016 INSURANCE EXPENSE Date 2016 Explanation Ref No. 516 Debit Credit Balance STORE SUPPLIES EXPENSE Date Explanation Ref Debit No. 517 Credit Balance 2016 DEPRECIATION EXPENSE Date Explanation Ref No. 520 Debit Credit Balance 2016 INTEREST EXPENSE Date Explanation Ref No. 530 Debit Credit Balance 2016 TAX EXPENSE Date Explanation Ref No. 601 Debit Credit Balance 2016 INCOME SUMMARY Date 2016 Explanation Ref No. 601 Debit Credit Balance Broad Street Bike Company Unadjusted Trial Balance At December 31, 2016 Account Debit Totals Credit Broad Street Bike Company Adjusted Trial Balance At December 31, 2016 Account Debit Credit Broad Street Bike Company Statement of Income For the period ended December 31, 2016 Totals Revenues; Expenses: Broad Street Bike Company Statement of Changes in Stockholders' Equity For the year ended December 31, 2016 Capital Net Income Retained Total Equity Stock Balance, Beginning Balance, December 31 Earnings Broad Street Bike Company Balance Sheet As of December 31, 2016 ASSETS: TOTAL ASSETS LIABILITIES AND EQUITY: Total liabilities Equity: Total Equity TOTAL LIABILITIES AND EQUITY Broad Street Bike Company Statement of Cash Flows For the period ended December 31, 2016 Operating Activities: Cash flow from operating activities Investing Activities: Cash flow from investing activities Financing Activities: Cash flow from financing activities Change in cash for the year Beginning cash balance Ending cash balance Broad Street Bike Company Post-Closing Trial Balance At December 31, 2016 Account Debit Totals Credit Note: ALL STATEMENTS ARE BEFORE THE ADDITIONAL TRANSACTIONS AND ACTIVITY HAVE BEEN ANALYZED. Note: ALL STATEMENTS ARE BEFORE THE ADDITIONAL TRANSACTIONS AND ACTIVITY HAVE BEEN ANALYZED. Note: ALL STATEMENTS ARE BEFORE THE ADDITIONAL TRANSACTIONS AND ACTIVITY HAVE BEEN ANALYZED. Note: ALL STATEMENTS ARE BEFORE THE ADDITIONAL TRANSACTIONS AND ACTIVITY HAVE BEEN ANALYZED. Note: ALL STATEMENTS ARE BEFORE THE ADDITIONAL TRANSACTIONS AND ACTIVITY HAVE BEEN ANALYZED. \fGENERAL LEDGER Date 2016 15Aug15 20Aug16 2Sep16 CASH No. 101 Explanation Ref Debit Credit Balance RUNNING FIXTURES AND J1 CAASE PURCHASE OF J2 BIKES PURCHASES OF J3 BIKES 4Sep16 SOLD IN CASH J4 1Oct16 SALARIES AND WAGES 5Oct16 SOLD IN CASH J7 TUNE UP REVENUE 30Oct16 CASH SALARIES 1Nov16 AND WAGES SERVICE 30Nov16 INCOME SALARIES 1Dec16 AND WAGES RETURN 2Dec16 INWARDS 30Sep16 15Dec16 19Dec16 30Dec16 30Dec16 6980 1,020 2,220 2,150 J6 3,870 800 J9 440 J10 J11 8000 (10,220) (9,720) (5,850) (5,050) (4,610) 1650 120 (6,260) (6,140) J12 1650 J13 310 J15 6980 (8,070) 1,650 J8 SOLD IN CASH J14 ADVANCE PAYMENT RECEIVED DIVIDENDS PAID TUNE UP REVENUE 0 5,720 (7,790) (8,100) (2,380) 400 (1,980) J16 J17 500 40 (2,480) (2,440) ACCOUNTS RECEIVABLE No. 102 Date 2016 Explanation Ref Debit Credit Balance STORE SUPPLIES No. 103 Date 2016 Explanation Ref Debit Credit RUNNING EXPENSE CLOSING Date 2016 Balance 0 PREPAID RENT No. 104 Explanation Ref Debit Credit Balance RUNNING BALANCE CLOSING 0 PREPAID INSURANCE No. 105 Date 2016 Explanation RUNNING CLOSING Ref Debit Credit Balance 0 INVENTORY - STANDARD BIKES No. 110 Date 2016 Explanation Ref Debit Credit Balance 0 INVENTORY - RACING BIKES No. 111 Date 2016 Explanation Ref Debit Credit Balance INVENTORY - CHILDREN'S BIKES No. 115 Date 2016 20Aug16 2Sep16 20Sep16 Date 2016 15AUG215 Explanation Ref PURCHASED IN J2 CASH CASH J3 PURCHASE PURCHASED J5 ON CREDIT Debit 1,020 2,220 2,870 Credit Balance 1,020 3,240 6,110 FIXTURES No. 120 Explanation Ref Debit Credit Balance CASH PURCHASE CLOSING J1 6980 6980 ACCUMULATED DEPRECIATION No. 122 Date 2016 Explanation 31Oct16 Ref Debit ACCU,ULATED DEPRECIATION Credit 1163.33333 Balance 1163.333 ACCOUNTS PAYABLE No. 201 Date 2016 20Sep16 Explanation PURCHASED ON CREDIT Ref Debit J5 Credit 2870 Balance 2870 UNEARNED SERVICE REVENUE No. 202 Date 2016 Date 2016 31Dec16 Explanation Ref Debit Credit Balance WAGES PAYABLE No. 203 Explanation Ref Debit Credit Balance SALARIES AND WAGES J18 1650 1650 Date 2016 Date 2016 TAXES PAYABLE No. 205 Explanation Ref Debit Credit Balance INTEREST PAYABLE No. 210 Explanation Ref Debit Credit Balance 0 Date 2016 NOTES PAYABLE No. 220 Explanation Ref Debit Credit Balance RUNNING BALANCE 0 CAPITAL STOCK No. 301 Date 2016 Explanation RUNNING Date Ref Debit Credit Balance 0 RETAINED EARNINGS No. 310 Explanation Ref Debit Credit Balance 2016 DIVIDENDS DECLARED No. 320 Date 2016 30Dec16 Date 2016 Explanation DIVIDENDS PAID Ref J16 Debit Credit Balance 500 500 SALES REVENUE No. 401 Explanation Ref Debit Credit Balance 4Sep16 SOLD IN CASH J4 2,150 5Oct16 SOLD IN CASH J7 3,870 15Dec16 CASH 2,150 6,020 5720 11,740 J14 SERVICE REVENUE No. 410 Date 2016 30Sep16 30Oct16 30Nov16 30Dec16 Explanation TUNE UP REVENUE CASH SERVICE INCOME SERVICE INCOME Ref Debit Credit Balance J8 800 J9 440 J11 120 J17 40 800 1240 1360 1400 COST OF GOODS SOLD No. 500 Date 2016 Explanation Ref Debit Credit Balance COST OF BIKE SUPPLIES No. 505 Date 2016 Explanation Ref Debit Credit Balance WAGE EXPENSE No. 511 Date 2016 1Oct16 1Nov16 1Dec16 31Dec16 Date 2016 Explanation Ref PAID SALARIES IN J6 CASH J10 SALARIES J12 AND WAGES SALARIES J18 AND WAGES Debit Credit Balance 1,650 1650 1,650 1,650 1,650 3,300 4,950 6,600 UTILITIES EXPENSE No. 512 Explanation Ref Debit Credit Balance Date 2016 SELLING EXPENSE No. 513 Explanation Ref Debit Credit Balance ADMINISTRATIVE EXPENSE No. 514 Date 2016 Date 2016 Explanation Ref Debit Credit Balance RENT EXPENSE No. 515 Explanation Ref Debit Credit Balance RUNNING EXPENSE INSURANCE EXPENSE No. 516 Date 2016 Explanation Ref Debit Credit Balance RUNNING EXPENSE STORE SUPPLIES EXPENSE No. 517 Date 2016 Explanation Ref Debit Credit Balance DEPRECIATION EXPENSE No. 520 Date Explanation 2016 31Oct15 DEPRECIATION Ref Debit Credit 1,163 Balance 1,163 INTEREST EXPENSE No. 530 Date 2016 Explanation Ref Debit Credit RUNNING EXPENSE Date 2016 Balance 0 TAX EXPENSE No. 601 Explanation Ref Debit Credit Balance RUNNING EXPENSE 0 INCOME SUMMARY No. 601 Date 2016 Explanation Ref Debit Credit Balance Date 2016 2Dec16 Date 2016 RETURN INWARDS No. 602 Explanation Ref Debit Credit Balance STANDARD BIKE RETURNED J13 310 310 EQUIPMENT No. 603 Explanation Ref Debit Credit Balance RUNNING BALANCE Date 2016 ADVANCE RECEIPTS No. 604 Explanation Ref Debit Credit Balance CASH RECEIVED IN ADVANCE 400 400 NOTES TO THE ACCOUNTS. The principle accounting policies adopted in the preparation of this finanial statements are set out below. 1. Basis of prepartion. The accounts are prepared under the historical cost convention and in compliance with International Accounting Standards. 2. Inventories. Inventories are stated at the lower of cost and net realizable value.Cost is determined on direct purchase value and all the cost attributed to bringing the inventory to its current location and condition. Net realizable value is the estimate of the selling price in the ordinary course of the business, less the selling expenses. Perpetual inventory system has been used by the company.Purchase are recognised as soon as they are made. 3. Property and equipments. Depreciation has been calculated on a straight line basis using the assets useful lifes. The useful lifes of the fixtures and display cases is 6 years. 4.Share Capital. The company has fully paid share capital of 10800 dollars. 5. Currency. All balances in the financial statements are in US Dollars. 6. Revenue Recognition. Revenue is recognized as soon as a sale is made or an advance payment has been made. Broad Street Bike Company Unadjusted Trial Balance At December 31, 2016 Account CASH ACCOUNTS RECEI STORE SUPLIES PREPAID RENT PREPAID INSURAN INVENTORY STAND EQUIPMENT FIXTURES AND DIS Debit 7,620 50 3,167 2,100 720 6,000 ACCUMULATED DEPRECIATION SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS ADVANCE RECIEPTS PURCHASES RETURN INWARDS COST OF GOODS WAGES EXPENSE UTILITIES EXPENS RENT EXPENSE INSURANCE EXPE OFFICE SUPPLIES DEPRECIATION EX INTEREST EXPENS TAX EXPENSE Credit 1,000 100 700 195 500 6,000 10,800 10,220 - 2,280 2,800 400 833 1,500 350 1,000 500 195 29,515 29,515 Broad Street Bike Company Adjusted Trial Balance At December 31, 2016 Account Debit Credit 5,180 CASH ACCOUNTS RECEIVABLE 50 STORE SUPLIES 3,167 PREPAID RENT 2,100 PREPAID INSURANCE 720 INVENTORY STANDARD BIKES 6,000 EQUIPMENT 6,980 FIXTURES AND DISPLAY 2,163 1,400 2,970 2,350 195 500 6,000 10,800 21,960 ACCUMULATED DEPRECIATION SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS 500 400 ADVANCE RECIEPTS PURCHASES RETURN INWARDS COST OF GOODS SOLD WAGES EXPENSE UTILITIES EXPENSE RENT EXPENSE INSURANCE EXPENSE OFFICE SUPPLIES DEPRECIATION EXPENSE INTEREST EXPENSE TAX EXPENSE 6,110 310 2,280 9,400 400 833 1,500 350 2,163 500 195 48,738 48,738 Broad Street Bike Company Statement of Income For the period ended December 31, 2016 Revenues; SALES REVENUE SERVICE REVENUE ADVANCE RECIEPTS 21960 1400 400 23760 Expenses: 6110 310 RETURN INWARDS 2280 COST OF GOODS SOLD 9400 WAGES EXPENSE 400 UTILITIES EXPENSE 833 RENT EXPENSE 1500 INSURANCE EXPENSE 350 OFFICE SUPPLIES DEPRECIATION EXPENSE 2163.3 500 (23,846.33) INTEREST EXPENSE PURCHASES PROFIT BEFORE TAX TAXATION Net Income (86.33) (195.00) (281.33) Broad Street Bike Company Balance Sheet As of December 31, 2016 ASSETS: CURRENT ASSETS CASH ACCOUNTS RECEIVABLE 5,180 - STORE SUPLIES 50 PREPAID RENT 3,167 PREPAID INSURANCE 2,100 INVENTORY STANDARD BIKES 720 NON CURRENT ASSETS EQUIPMENT 6,000 FIXTURES 6,980 DEPRECIATION (2,163) 11,217 10,817 22,034 TOTAL ASSETS LIABILITIES AND EQUITY: CURRENT LIABLITIES ACCOUNTS PAYABLE 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABLE 500 6,015 6,000 6,000 NON CURRENT LIABILITIES NOTES PAYABLE Total liabilities 12,015 Equity: CHANGES IN EQUITY Total Equity 10,019 TOTAL LIABILITIES AND EQUITY 22,034 Broad Street Bike Company Statement of Changes in Stockholders' Equity For the year ended December 31, 2016 Balance, Beginning PROFIT DURING THE YEAR DIVIDENDS PAID Balance, December 31 Retaine Capital d Stock Earning s ### - Total Equity ### ### (281.33) ### (500.00) ### Broad Street Bike Company Statement of Cash Flows For the period ended December 31, 2016 Operating Activities: REPORTED LOSS ADD BACK DEPRECIATION INREASE IN ACCOUNT PAYABLE TAXATION INTEREST PAYABLE INCREASE IN INVENTORY INSURANCE PREPAYMENT RENT PREPAYMENT STORE SUPPLIES Cash flow from operating activities (281) 2,163 5,320 195 500 (720) (2,100) (3,167) (50) 1,860 Investing Activities: PURCHASE OF EQUIPMENT (12,980) Cash flow from investing activities (12,980) Financing Activities: DIVIDENDS PAID ISSUANCE OF COMMON STOCK ISSUANCE OF NOTES PAYABLE Cash flow from financing activities Change in cash for the year (500) 10,800 6,000 16,300 5,180 Beginning cash balance Ending cash balance 5,180 Broad Street Bike Company Post-Closing Trial Balance At December 31, 2016 Account CASH Debit Credit 5,180 STORE SUPPLIES 50 PREPAID RENT 3,167 PREPAID INSURANCE INVENTORY STANDARD BIKES EQUIPMENT FIXTURES AND DISPLAY 2,100 720 6,000 6,980 DEPRECIATION 2,163 ACCOUNTS PAYABLE 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABLE 500 NOTES PAYABLE 6,000 CAPITAL STOCK 10,800 RETAINED EARNINGS Totals 781 24,978 24,978 UNADJUSTED TRIAL BALANCE ADJUSTMENTS DR CR DR CR CASH 7,620 ACCOUNTS STORE SUPL 50 PREPAID R 3,167 PREPAID I 2,100 INVENTORY 720 EQUIPMEN 6,000 FIXTURES AND DISPLAY 6,980 ACCUMULATED DEPREC SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS ADVANCE RECIEPTS PURCHASE RETURN I COST OF G WAGES EXP UTILITIES RENT EXPE INSURANCE OFFICE SUP DEPRECIAT INTEREST TAX EXPEN 1,000 100 700 195 500 6,000 10,800 10,220 - 1,163 1,400 2,870 1,650 11,740 500 2,163 1,400 2,970 2,350 195 500 6,000 10,800 21,960 500 400 2,280 2,800 400 833 1,500 350 1,000 500 195 29,515 ADJUSTED TRIAL BALANCE DR CR 2,440 5,180 50 3,167 2,100 720 6,000 6,980 - 6,110 310 6,600 1,163 29,515 21,663 21,663 400 6,110 310 2,280 9,400 400 833 1,500 350 2,163 500 195 48,738 48,738 PURCHASE PRICE FIXTURES DISPLAY CASES SHIPPING COSTS INSTALLATION CO LESS DISPOSAL P 1,600 4,800 200 500 7,100 (120) 6,980 GENERAL LEDGER Date 2016 CASH No. 101 Explanation Ref Debit Credit Balance RUNNING FIXTURES AND 15Aug15 J1 CAASE PURCHASE OF 20Aug16 J2 BIKES PURCHASES OF 2Sep16 J3 BIKES 4Sep16 SOLD IN CASH J4 SALARIES 1Oct16 J6 AND WAGES 5Oct16 SOLD IN CASH J7 TUNE UP 30Sep16 J8 REVENUE 30Oct16 CASH J9 SALARIES 1Nov16 J10 AND WAGES SERVICE 30Nov16 J11 INCOME SALARIES 1Dec16 J12 AND WAGES RETURN 2Dec16 J13 INWARDS 15Dec16 SOLD IN CASH J14 ADVANCE 19Dec16 J15 PAYMENT RECEIVED DIVIDENDS 30Dec16 J16 PAID TUNE UP 30Dec16 J17 REVENUE 0 6980 1,020 2,220 2,150 1,650 3,870 800 6980 8000 (10,220) (8,070) (9,720) (5,850) (5,050) (4,610) 440 1650 120 (6,260) (6,140) 1650 310 5,720 (7,790) (8,100) (2,380) 400 (1,980) 500 40 (2,480) (2,440) ACCOUNTS RECEIVABLE No. 102 Date 2016 Explanation Ref Debit Credit Balance STORE SUPPLIES No. 103 Date 2016 Explanation Ref Debit Credit RUNNING EXPENSE CLOSING Date 2016 Balance 0 PREPAID RENT No. 104 Explanation Ref Debit Credit Balance RUNNING BALANCE CLOSING 0 PREPAID INSURANCE No. 105 Date 2016 Explanation RUNNING CLOSING Ref Debit Credit Balance 0 INVENTORY - STANDARD BIKES No. 110 Date 2016 Explanation Ref Debit Credit Balance 0 INVENTORY - RACING BIKES No. 111 Date 2016 Explanation Ref Debit Credit Balance INVENTORY - CHILDREN'S BIKES No. 115 Date 2016 20Aug16 2Sep16 20Sep16 Date 2016 15AUG215 Explanation Ref PURCHASED IN J2 CASH CASH J3 PURCHASE PURCHASED J5 ON CREDIT Debit 1,020 2,220 2,870 Credit Balance 1,020 3,240 6,110 FIXTURES No. 120 Explanation Ref Debit Credit Balance CASH PURCHASE CLOSING J1 6980 6980 ACCUMULATED DEPRECIATION No. 122 Date 2016 Explanation 31Oct16 Ref Debit ACCU,ULATED DEPRECIATION Credit 1163.33333 Balance 1163.333 ACCOUNTS PAYABLE No. 201 Date 2016 20Sep16 Explanation PURCHASED ON CREDIT Ref Debit J5 Credit 2870 Balance 2870 UNEARNED SERVICE REVENUE No. 202 Date 2016 Date 2016 31Dec16 Explanation Ref Debit Credit Balance WAGES PAYABLE No. 203 Explanation Ref Debit Credit Balance SALARIES AND WAGES J18 1650 1650 TAXES PAYABLE No. 205 Explanation Ref Debit Credit Balance Date 2016 INTEREST PAYABLE No. 210 Explanation Ref Debit Credit Balance Date 2016 0 NOTES PAYABLE No. 220 Explanation Ref Debit Credit Balance Date 2016 RUNNING BALANCE 0 CAPITAL STOCK No. 301 Date 2016 Explanation Ref Debit Credit Balance RUNNING 0 RETAINED EARNINGS No. 310 Explanation Ref Debit Credit Balance Date 2016 DIVIDENDS DECLARED No. 320 Date 2016 30Dec16 Date 2016 4Sep16 5Oct16 15Dec16 Explanation DIVIDENDS PAID Ref J16 Debit Credit Balance 500 500 SALES REVENUE No. 401 Explanation Ref Debit Credit Balance SOLD IN CASH J4 SOLD IN CASH J7 CASH J14 2,150 2,150 3,870 6,020 5720 11,740 SERVICE REVENUE No. 410 Date 2016 30Sep16 30Oct16 30Nov16 30Dec16 Explanation TUNE UP REVENUE CASH SERVICE INCOME SERVICE INCOME Ref Debit Credit Balance J8 800 J9 440 J11 120 J17 40 800 1240 1360 1400 COST OF GOODS SOLD No. 500 Date 2016 Explanation Ref Debit Credit Balance COST OF BIKE SUPPLIES No. 505 Date 2016 Explanation Ref Debit Credit Balance WAGE EXPENSE No. 511 Date 2016 1Oct16 1Nov16 1Dec16 31Dec16 Date 2016 Date 2016 Explanation Ref PAID SALARIES IN J6 CASH J10 SALARIES J12 AND WAGES SALARIES J18 AND WAGES Debit 1,650 1650 1,650 1,650 Credit Balance 1,650 3,300 4,950 6,600 UTILITIES EXPENSE No. 512 Explanation Ref Debit Credit Balance SELLING EXPENSE No. 513 Explanation Ref Debit Credit Balance ADMINISTRATIVE EXPENSE No. 514 Date 2016 Date 2016 Explanation Ref Debit Credit Balance RENT EXPENSE No. 515 Explanation Ref Debit Credit Balance RUNNING EXPENSE INSURANCE EXPENSE No. 516 Date 2016 Explanation Ref Debit Credit Balance RUNNING EXPENSE Date 2016 STORE SUPPLIES EXPENSE No. 517 Explanation Ref Debit Credit Balance DEPRECIATION EXPENSE No. 520 Date Explanation 2016 31Oct15 DEPRECIATION Ref Debit Credit 1,163 Balance 1,163 INTEREST EXPENSE No. 530 Date 2016 Explanation Ref Debit Credit RUNNING EXPENSE Date 2016 Balance 0 TAX EXPENSE No. 601 Explanation Ref Debit Credit Balance RUNNING EXPENSE 0 INCOME SUMMARY No. 601 Date 2016 Explanation Ref Debit Credit Balance Date 2016 2Dec16 Date 2016 RETURN INWARDS No. 602 Explanation Ref Debit Credit Balance STANDARD BIKE RETURNED J13 310 310 EQUIPMENT No. 603 Explanation Ref Debit Credit Balance RUNNING BALANCE Date 2016 ADVANCE RECEIPTS No. 604 Explanation Ref Debit Credit Balance CASH RECEIVED IN ADVANCE 400 400 NOTES TO THE ACCOUNTS. The principle accounting policies adopted in the preparation of this finanial statements are set out below. 1. Basis of prepartion. The accounts are prepared under the historical cost convention and in compliance with International Accounting Standards. 2. Inventories. Inventories are stated at the lower of cost and net realizable value.Cost is determined on direct purchase value and all the cost attributed to bringing the inventory to its current location and condition. Net realizable value is the estimate of the selling price in the ordinary course of the business, less the selling expenses. Perpetual inventory system has been used by the company.Purchase are recognised as soon as they are made. 3. Property and equipments. Depreciation has been calculated on a straight line basis using the assets useful lifes. The useful lifes of the fixtures and display cases is 6 years. 4.Share Capital. The company has fully paid share capital of 10800 dollars. 5. Currency. All balances in the financial statements are in US Dollars. 6. Revenue Recognition. Revenue is recognized as soon as a sale is made or an advance payment has been made. Broad Street Bike Company Unadjusted Trial Balance At December 31, 2016 Account CASH ACCOUNTS RECEI STORE SUPLIES PREPAID RENT PREPAID INSURAN INVENTORY STAND EQUIPMENT FIXTURES AND DIS Debit 7,620 50 3,167 2,100 720 6,000 ACCUMULATED DEPRECIATION SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS ADVANCE RECIEPTS PURCHASES RETURN INWARDS COST OF GOODS WAGES EXPENSE UTILITIES EXPENS RENT EXPENSE INSURANCE EXPE OFFICE SUPPLIES DEPRECIATION EX INTEREST EXPENS TAX EXPENSE Credit 1,000 100 700 195 500 6,000 10,800 10,220 - 2,280 2,800 400 833 1,500 350 1,000 500 195 29,515 29,515 Broad Street Bike Company Adjusted Trial Balance At December 31, 2016 Account Debit Credit 5,180 CASH ACCOUNTS RECEIVABLE 50 STORE SUPLIES 3,167 PREPAID RENT 2,100 PREPAID INSURANCE 720 INVENTORY STANDARD BIKES 6,000 EQUIPMENT 6,980 FIXTURES AND DISPLAY 2,163 1,400 2,970 2,350 195 500 6,000 10,800 21,960 ACCUMULATED DEPRECIATION SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS 500 400 ADVANCE RECIEPTS PURCHASES RETURN INWARDS COST OF GOODS SOLD WAGES EXPENSE UTILITIES EXPENSE RENT EXPENSE INSURANCE EXPENSE OFFICE SUPPLIES DEPRECIATION EXPENSE INTEREST EXPENSE TAX EXPENSE 6,110 310 2,280 9,400 400 833 1,500 350 2,163 500 195 48,738 48,738 Broad Street Bike Company Statement of Income For the period ended December 31, 2016 Revenues; SALES REVENUE SERVICE REVENUE ADVANCE RECIEPTS 21960 1400 400 23760 Expenses: 6110 310 RETURN INWARDS 2280 COST OF GOODS SOLD 9400 WAGES EXPENSE 400 UTILITIES EXPENSE 833 RENT EXPENSE 1500 INSURANCE EXPENSE 350 OFFICE SUPPLIES DEPRECIATION EXPENSE 2163.3 500 (23,846.33) INTEREST EXPENSE PURCHASES PROFIT BEFORE TAX TAXATION Net Income (86.33) (195.00) (281.33) Broad Street Bike Company Balance Sheet As of December 31, 2016 ASSETS: CURRENT ASSETS CASH ACCOUNTS RECEIVABLE 5,180 - STORE SUPLIES 50 PREPAID RENT 3,167 PREPAID INSURANCE 2,100 INVENTORY STANDARD BIKES 720 NON CURRENT ASSETS EQUIPMENT 6,000 FIXTURES 6,980 DEPRECIATION (2,163) 11,217 10,817 22,034 TOTAL ASSETS LIABILITIES AND EQUITY: CURRENT LIABLITIES ACCOUNTS PAYABLE 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABLE 500 6,015 6,000 6,000 NON CURRENT LIABILITIES NOTES PAYABLE Total liabilities 12,015 Equity: CHANGES IN EQUITY Total Equity 10,019 TOTAL LIABILITIES AND EQUITY 22,034 Broad Street Bike Company Statement of Changes in Stockholders' Equity For the year ended December 31, 2016 Balance, Beginning Share issue PROFIT DURING THE YEAR DIVIDENDS PAID Retaine Capital d Stock Earning s ### ### - Total Equity ### - ### (281.33) - ### (500.00) b7 now b8-is the share capital that was issued during d7 now d8 is the same value of share capital that has b d12-is the summation of the d 7 to d12 column. Balance, December 31 ### ### ### Note:there was no balance of capital stock and retaine operations begun in the middle of the year. Row seven re capital that was issued during the year for the company to commence business e value of share capital that has been taken from b8 n of the d 7 to d12 column. alance of capital stock and retained earnings at the beginning of the year because the middle of the year. Row seven thus should be left blank. Broad Street Bike Company Statement of Cash Flows For the period ended December 31, 2016 Operating Activities: REPORTED LOSS ADD BACK DEPRECIATION INREASE IN ACCOUNT PAYABLE TAXATION INTEREST PAYABLE INCREASE IN INVENTORY INSURANCE PREPAYMENT RENT PREPAYMENT STORE SUPPLIES Cash flow from operating activities (281) 2,163 5,320 195 500 (720) (2,100) (3,167) (50) 1,860 Investing Activities: PURCHASE OF EQUIPMENT (12,980) Cash flow from investing activities (12,980) Financing Activities: DIVIDENDS PAID ISSUANCE OF COMMON STOCK ISSUANCE OF NOTES PAYABLE Cash flow from financing activities Change in cash for the year (500) 10,800 6,000 16,300 5,180 Beginning cash balance Ending cash balance 5,180 Broad Street Bike Company Post-Closing Trial Balance At December 31, 2016 Account CASH Debit Credit 5,180 STORE SUPPLIES 50 PREPAID RENT 3,167 PREPAID INSURANCE INVENTORY STANDARD BIKES EQUIPMENT FIXTURES AND DISPLAY 2,100 720 6,000 6,980 DEPRECIATION 2,163 ACCOUNTS PAYABLE 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABLE 500 NOTES PAYABLE 6,000 CAPITAL STOCK 10,800 RETAINED EARNINGS Totals 781 24,978 24,978 UNADJUSTED TRIAL BALANCE ADJUSTMENTS DR CR DR CR CASH 7,620 ACCOUNTS STORE SUPL 50 PREPAID R 3,167 PREPAID I 2,100 INVENTORY 720 EQUIPMEN 6,000 FIXTURES AND DISPLAY 6,980 ACCUMULATED DEPREC SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS ADVANCE RECIEPTS PURCHASE RETURN I COST OF G WAGES EXP UTILITIES RENT EXPE INSURANCE OFFICE SUP DEPRECIAT INTEREST TAX EXPEN 1,000 100 700 195 500 6,000 10,800 10,220 - 1,163 1,400 2,870 1,650 11,740 500 2,163 1,400 2,970 2,350 195 500 6,000 10,800 21,960 500 400 2,280 2,800 400 833 1,500 350 1,000 500 195 29,515 ADJUSTED TRIAL BALANCE DR CR 2,440 5,180 50 3,167 2,100 720 6,000 6,980 - 6,110 310 6,600 1,163 29,515 21,663 21,663 400 6,110 310 2,280 9,400 400 833 1,500 350 2,163 500 195 48,738 48,738 PURCHASE PRICE FIXTURES DISPLAY CASES SHIPPING COSTS INSTALLATION CO LESS DISPOSAL P 1,600 4,800 200 500 7,100 (120) 6,980 Intermediate Accounting Accounting Cycle Project - Part 2 Updated Instructions (December 7, 2016) Deliverables Percent of Grade 20% Requirement Appropriate writing and communication. Explanation You will be graded on the writing in the footnotes to the financial statements in part 6 and in your memos in part 4 and 5. See writing rubric below. 2 . Analysis of transactions. Prepare journal entries for each transaction, post these to the ledgers, and prepare a trial balance. If you need to add accounts to the Chart of Accounts, you can. Journal entries for the new activity, including all adjusting journal entries for the new activity. Ledgers and a trial balance are also desirable, but not required. 10% 3 . Accounting for inventory: inventory cost flow methods. Determine possible alternatives and select a method. You may consider looking at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives. Quantitative analysis of alternative inventory methods. 15% 4 . Accounting for equipment: purchase price and subsequent measurement. Determine accounting for purchases made on August 15. You may consider looking at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives. Quantitative analysis of acquisition cost and alternative depreciation methods. 15% 5 . Discussion of effect of choices on the financial statements and justification of the choice made. Based on parts 3 and 4, present an analysis of the alternatives. Show and discuss financial statements effects of the alternative methods and estimates. Explain why you select Building on 3 and 4, quantitative analysis of effects of alternative methods on financial statements and financial statement ratios. 15% 1 . the alternative that you use in the financial statements. Examine the effects of the alternatives on common financial statement ratios of profitability, liquidity, and solvency. 6 . Preparation of financial statements and notes to the financial statements. From your adjusted trial balance, prepare the financial statements and footnotes. Be sure to include a \"Significant accounting policies\" footnote with policies for revenue recognition, inventory and property, plant and equipment policies. Also, include the more detailed footnotes on revenue recognition, inventory and property plant and equipment policies based on ASC disclosures and text. Your responses to parts 3 and 4 will determine the amounts reported. For inventory and depreciation, written justification of method selected. 25% Financial statements with notes. You should include at least four notes including notes on \"Significant accounting policies\Intermediate Accounting Accounting Cycle Project - Part 2 Updated Instructions (December 7, 2016) Deliverables Percent of Grade 20% Requirement Appropriate writing and communication. Explanation You will be graded on the writing in the footnotes to the financial statements in part 6 and in your memos in part 4 and 5. See writing rubric below. 2 . Analysis of transactions. Prepare journal entries for each transaction, post these to the ledgers, and prepare a trial balance. If you need to add accounts to the Chart of Accounts, you can. Journal entries for the new activity, including all adjusting journal entries for the new activity. Ledgers and a trial balance are also desirable, but not required. 10% 3 . Accounting for inventory: inventory cost flow methods. Determine possible alternatives and select a method. You may consider looking at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives. Quantitative analysis of alternative inventory methods. 15% 4 . Accounting for equipment: purchase price and subsequent measurement. Determine accounting for purchases made on August 15. You may consider looking at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives. Quantitative analysis of acquisition cost and alternative depreciation methods. 15% 5 . Discussion of effect of choices on the financial statements and justification of the choice made. Based on parts 3 and 4, present an analysis of the alternatives. Show and discuss financial statements effects of the alternative methods and estimates. Explain why you select Building on 3 and 4, quantitative analysis of effects of alternative methods on financial statements and financial statement ratios. 15% 1 . the alternative that you use in the financial statements. Examine the effects of the alternatives on common financial statement ratios of profitability, liquidity, and solvency. 6 . Preparation of financial statements and notes to the financial statements. From your adjusted trial balance, prepare the financial statements and footnotes. Be sure to include a \"Significant accounting policies\" footnote with policies for revenue recognition, inventory and property, plant and equipment policies. Also, include the more detailed footnotes on revenue recognition, inventory and property plant and equipment policies based on ASC disclosures and text. Your responses to parts 3 and 4 will determine the amounts reported. For inventory and depreciation, written justification of method selected. 25% Financial statements with notes. You should include at least four notes including notes on \"Significant accounting policies\GENERAL LEDGER Date 2016 CASH No. 101 Explanation Ref Debit Credit Balance RUNNING FIXTURES AND 15Aug15 J1 CAASE PURCHASE OF 20Aug16 J2 BIKES PURCHASES OF 2Sep16 J3 BIKES 4Sep16 SOLD IN CASH J4 SALARIES 1Oct16 J6 AND WAGES 5Oct16 SOLD IN CASH J7 TUNE UP 30Sep16 J8 REVENUE 30Oct16 CASH J9 SALARIES 1Nov16 J10 AND WAGES SERVICE 30Nov16 J11 INCOME SALARIES 1Dec16 J12 AND WAGES RETURN 2Dec16 J13 INWARDS 15Dec16 SOLD IN CASH J14 ADVANCE 19Dec16 J15 PAYMENT RECEIVED DIVIDENDS 30Dec16 J16 PAID TUNE UP 30Dec16 J17 REVENUE 0 6980 1,020 2,220 2,150 1,650 3,870 800 6980 8000 (10,220) (8,070) (9,720) (5,850) (5,050) (4,610) 440 1650 120 (6,260) (6,140) 1650 310 5,720 (7,790) (8,100) (2,380) 400 (1,980) 500 40 (2,480) (2,440) ACCOUNTS RECEIVABLE No. 102 Date 2016 Explanation Ref Debit Credit Balance STORE SUPPLIES No. 103 Date 2016 Explanation Ref Debit Credit RUNNING EXPENSE CLOSING Date 2016 Balance 0 PREPAID RENT No. 104 Explanation Ref Debit Credit Balance RUNNING BALANCE CLOSING 0 PREPAID INSURANCE No. 105 Date 2016 Explanation RUNNING CLOSING Ref Debit Credit Balance 0 INVENTORY - STANDARD BIKES No. 110 Date 2016 Explanation Ref Debit Credit Balance 0 INVENTORY - RACING BIKES No. 111 Date 2016 Explanation Ref Debit Credit Balance INVENTORY - CHILDREN'S BIKES No. 115 Date 2016 20Aug16 2Sep16 20Sep16 Date 2016 15AUG215 Explanation Ref PURCHASED IN J2 CASH CASH J3 PURCHASE PURCHASED J5 ON CREDIT Debit 1,020 2,220 2,870 Credit Balance 1,020 3,240 6,110 FIXTURES No. 120 Explanation Ref Debit Credit Balance CASH PURCHASE CLOSING J1 6980 6980 ACCUMULATED DEPRECIATION No. 122 Date 2016 Explanation 31Oct16 Ref Debit ACCU,ULATED DEPRECIATION Credit 1163.33333 Balance 1163.333 ACCOUNTS PAYABLE No. 201 Date 2016 20Sep16 Explanation PURCHASED ON CREDIT Ref Debit J5 Credit 2870 Balance 2870 UNEARNED SERVICE REVENUE No. 202 Date 2016 Date 2016 31Dec16 Explanation Ref Debit Credit Balance WAGES PAYABLE No. 203 Explanation Ref Debit Credit Balance SALARIES AND WAGES J18 1650 1650 TAXES PAYABLE No. 205 Explanation Ref Debit Credit Balance Date 2016 INTEREST PAYABLE No. 210 Explanation Ref Debit Credit Balance Date 2016 0 NOTES PAYABLE No. 220 Explanation Ref Debit Credit Balance Date 2016 RUNNING BALANCE 0 CAPITAL STOCK No. 301 Date 2016 Explanation Ref Debit Credit Balance RUNNING 0 RETAINED EARNINGS No. 310 Explanation Ref Debit Credit Balance Date 2016 DIVIDENDS DECLARED No. 320 Date 2016 30Dec16 Date 2016 4Sep16 5Oct16 15Dec16 Explanation DIVIDENDS PAID Ref J16 Debit Credit Balance 500 500 SALES REVENUE No. 401 Explanation Ref Debit Credit Balance SOLD IN CASH J4 SOLD IN CASH J7 CASH J14 2,150 2,150 3,870 6,020 5720 11,740 SERVICE REVENUE No. 410 Date 2016 30Sep16 30Oct16 30Nov16 30Dec16 Explanation TUNE UP REVENUE CASH SERVICE INCOME SERVICE INCOME Ref Debit Credit Balance J8 800 J9 440 J11 120 J17 40 800 1240 1360 1400 COST OF GOODS SOLD No. 500 Date 2016 Explanation Ref Debit Credit Balance COST OF BIKE SUPPLIES No. 505 Date 2016 Explanation Ref Debit Credit Balance WAGE EXPENSE No. 511 Date 2016 1Oct16 1Nov16 1Dec16 31Dec16 Date 2016 Date 2016 Explanation Ref PAID SALARIES IN J6 CASH J10 SALARIES J12 AND WAGES SALARIES J18 AND WAGES Debit 1,650 1650 1,650 1,650 Credit Balance 1,650 3,300 4,950 6,600 UTILITIES EXPENSE No. 512 Explanation Ref Debit Credit Balance SELLING EXPENSE No. 513 Explanation Ref Debit Credit Balance ADMINISTRATIVE EXPENSE No. 514 Date 2016 Date 2016 Explanation Ref Debit Credit Balance RENT EXPENSE No. 515 Explanation Ref Debit Credit Balance RUNNING EXPENSE INSURANCE EXPENSE No. 516 Date 2016 Explanation Ref Debit Credit Balance RUNNING EXPENSE Date 2016 STORE SUPPLIES EXPENSE No. 517 Explanation Ref Debit Credit Balance DEPRECIATION EXPENSE No. 520 Date Explanation 2016 31Oct15 DEPRECIATION Ref Debit Credit 1,163 Balance 1,163 INTEREST EXPENSE No. 530 Date 2016 Explanation Ref Debit Credit RUNNING EXPENSE Date 2016 Balance 0 TAX EXPENSE No. 601 Explanation Ref Debit Credit Balance RUNNING EXPENSE 0 INCOME SUMMARY No. 601 Date 2016 Explanation Ref Debit Credit Balance Date 2016 2Dec16 Date 2016 RETURN INWARDS No. 602 Explanation Ref Debit Credit Balance STANDARD BIKE RETURNED J13 310 310 EQUIPMENT No. 603 Explanation Ref Debit Credit Balance RUNNING BALANCE Date 2016 ADVANCE RECEIPTS No. 604 Explanation Ref Debit Credit Balance CASH RECEIVED IN ADVANCE 400 400 Based on the alternatives taken, the follwing analysis ratios can be computed from the financial statements. 1 LIQUITY RATIOS These type of ratios a business's liquidity i.e.e the ability to convert its assets to cash and pay off its obligations without any significant difficult. Examples of these ratios include: A CURRENT RATIO. This type of ratio helps measure short term debt-paying ability without regard to the liquidity of the current assets. Current ratio=Current Assets/Current Liabilities. CURRENT LIABILITIES ACCOUNTS PAYAB 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABL 500 6,015 CURRENT ASSETS CASH STORE SUPLIES PREPAID RENT PREPAID INSURANCE INVENTORY STANDARD BI 5,180 50 3,167 2,100 720 11,217 CURRENT RATIO 1.8648379 THE RESULT SHOWS THAT THERE ARE 1.8648 DOLARS WORTH OF ASSETS TO COVER LIABI THIS VALUE IS BELOW THE TRESHOLD OF 2:1 BUT THE COMPANY IS NOT DOING BADLY OF B QUICK RATIO This measures the short term debt paying ability without having to rely on the sale of inventory. QUICK RATIO=CASH+MKTBLE +AR)/CURRENT LIABILITIES. CASH 5180 CRRENT ASSETS ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE 2970 2350 195 INTEREST PAYABLE 500 6015 QUICK RATIO 0.8611804 THIS SHOWS THAT THE COMPANY IS ABLE TO SETTLE MORE THAN HALF OF ITS LIABILITIES INSTANEOUSLY. PROFITABILITY RATIOS A GROSS PROFIT MARGIN=GROSS PROFIT /NET SALES(REVENUE) GROSS PROFIT 21,480.00 NET SALES 23760 GROSS PROFIT MARGIN 90% MEANS THE COMPANY CAN REDUCE THE SELLING PRICE BY 90% WITHOUT INCURRING A L B RETURN ON ASSETS HELPS MEASURE THE EARNING POWER ON ALL ASSETS. RETURN ON ASSETS=(NET INCOME/SALES)*(SALES/TOTAL ASSETS) NET INCOME SALES TOTAL ASSETS (281) 23,760 22,034 -0.012768 SOLVENCY RATIOS These type of ratios assess the long term financial viabilityof the ability of a busines to pay off its long term obligations such as notes payable and bank loans. Examples of these ratios include: DEBT RATIO DEBT RATIO=TOTAL DEBT/TOTAL ASSETS. ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE 2,970 2,350 195 500 6,015 TOTAL ASSETS DEBT RATIO 22,034 0.2729913 NOTES PAYABLE HAVE BEEN EXCLUDED BECAUSE IT IS NOT A DEBT. DEBT TO EQUITY RATIO. This is a ratio of total liabilities of a busines to the shareholders equity. Debt to equity ratio=Total liabilities/Shareholders equity TOTAL LIABILITIE SHAREHOLDERS E DEBT TO EQUITY 12,015 10,019 1.20 Lower debt to equity values are prefered.The value obtained above is too high meaning that the company has a high risk of solvency. OF ASSETS TO COVER LIABILITIES WORTH 1 DOLLAR Y IS NOT DOING BADLY OFF. he sale of inventory. % WITHOUT INCURRING A LOSS. Broad Street Bike Company Balance Sheet As of December 31, 2016 ASSETS: CURRENT ASSETS CASH ACCOUNTS RECEIVABLE 5,180 - STORE SUPLIES 50 PREPAID RENT 3,167 PREPAID INSURANCE 2,100 INVENTORY STANDARD BIKES 720 NON CURRENT ASSETS EQUIPMENT 6,000 FIXTURES 6,980 DEPRECIATION (2,163) 11,217 10,817 22,034 TOTAL ASSETS LIABILITIES AND EQUITY: CURRENT LIABLITIES ACCOUNTS PAYABLE 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABLE 500 6,015 6,000 6,000 NON CURRENT LIABILITIES NOTES PAYABLE Total liabilities 12,015 Equity: CHANGES IN EQUITY Total Equity 10,019 TOTAL LIABILITIES AND EQUITY 22,034 Broad Street Bike Company Unadjusted Trial Balance At December 31, 2016 Account CASH ACCOUNTS RECEI STORE SUPLIES PREPAID RENT PREPAID INSURAN INVENTORY STAND EQUIPMENT FIXTURES AND DIS Debit 7,620 50 3,167 2,100 720 6,000 ACCUMULATED DEPRECIATION SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS ADVANCE RECIEPTS PURCHASES RETURN INWARDS COST OF GOODS WAGES EXPENSE UTILITIES EXPENS RENT EXPENSE INSURANCE EXPE OFFICE SUPPLIES DEPRECIATION EX INTEREST EXPENS TAX EXPENSE Credit 1,000 100 700 195 500 6,000 10,800 10,220 - 2,280 2,800 400 833 1,500 350 1,000 500 195 29,515 29,515 Broad Street Bike Company Adjusted Trial Balance At December 31, 2016 Account Debit Credit 5,180 CASH ACCOUNTS RECEIVABLE 50 STORE SUPLIES 3,167 PREPAID RENT 2,100 PREPAID INSURANCE 720 INVENTORY STANDARD BIKES 6,000 EQUIPMENT 6,980 FIXTURES AND DISPLAY 2,163 1,400 2,970 2,350 195 500 6,000 10,800 21,960 ACCUMULATED DEPRECIATION SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS 500 400 ADVANCE RECIEPTS PURCHASES RETURN INWARDS COST OF GOODS SOLD WAGES EXPENSE UTILITIES EXPENSE RENT EXPENSE INSURANCE EXPENSE OFFICE SUPPLIES DEPRECIATION EXPENSE INTEREST EXPENSE TAX EXPENSE 6,110 310 2,280 9,400 400 833 1,500 350 2,163 500 195 48,738 48,738 Broad Street Bike Company Statement of Income For the period ended December 31, 2016 Revenues; SALES REVENUE SERVICE REVENUE ADVANCE RECIEPTS 21960 1400 400 23760 Expenses: 6110 310 RETURN INWARDS 2280 COST OF GOODS SOLD 9400 WAGES EXPENSE 400 UTILITIES EXPENSE 833 RENT EXPENSE 1500 INSURANCE EXPENSE 350 OFFICE SUPPLIES DEPRECIATION EXPENSE 2163.3 500 (23,846.33) INTEREST EXPENSE PURCHASES PROFIT BEFORE TAX TAXATION Net Income (86.33) (195.00) (281.33) Broad Street Bike Company Statement of Changes in Stockholders' Equity For the year ended December 31, 2016 Balance, Beginning Share issue PROFIT DURING THE YEAR DIVIDENDS PAID Retaine Capital d Stock Earning s ### ### - Total Equity ### - ### (281.33) - ### (500.00) b7 now b8-is the share capital that was issued during d7 now d8 is the same value of share capital that has b d12-is the summation of the d 7 to d12 column. Balance, December 31 ### ### ### Note:there was no balance of capital stock and retaine operations begun in the middle of the year. Row seven re capital that was issued during the year for the company to commence business e value of share capital that has been taken from b8 n of the d 7 to d12 column. alance of capital stock and retained earnings at the beginning of the year because the middle of the year. Row seven thus should be left blank. Broad Street Bike Company Statement of Cash Flows For the period ended December 31, 2016 Operating Activities: REPORTED LOSS ADD BACK DEPRECIATION INREASE IN ACCOUNT PAYABLE TAXATION INTEREST PAYABLE INCREASE IN INVENTORY INSURANCE PREPAYMENT RENT PREPAYMENT STORE SUPPLIES Cash flow from operating activities (281) 2,163 5,320 195 500 (720) (2,100) (3,167) (50) 1,860 Investing Activities: PURCHASE OF EQUIPMENT (12,980) Cash flow from investing activities (12,980) Financing Activities: DIVIDENDS PAID ISSUANCE OF COMMON STOCK ISSUANCE OF NOTES PAYABLE Cash flow from financing activities Change in cash for the year (500) 10,800 6,000 16,300 5,180 Beginning cash balance Ending cash balance 5,180 Broad Street Bike Company Post-Closing Trial Balance At December 31, 2016 Account CASH Debit Credit 5,180 STORE SUPPLIES 50 PREPAID RENT 3,167 PREPAID INSURANCE INVENTORY STANDARD BIKES EQUIPMENT FIXTURES AND DISPLAY 2,100 720 6,000 6,980 DEPRECIATION 2,163 ACCOUNTS PAYABLE 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABLE 500 NOTES PAYABLE 6,000 CAPITAL STOCK 10,800 RETAINED EARNINGS Totals 781 24,978 24,978 UNADJUSTED TRIAL BALANCE ADJUSTMENTS DR CR DR CR CASH 7,620 ACCOUNTS STORE SUPL 50 PREPAID R 3,167 PREPAID I 2,100 INVENTORY 720 EQUIPMEN 6,000 FIXTURES AND DISPLAY 6,980 ACCUMULATED DEPREC SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS ADVANCE RECIEPTS PURCHASE RETURN I COST OF G WAGES EXP UTILITIES RENT EXPE INSURANCE OFFICE SUP DEPRECIAT INTEREST TAX EXPEN 1,000 100 700 195 500 6,000 10,800 10,220 - 1,163 1,400 2,870 1,650 11,740 500 2,163 1,400 2,970 2,350 195 500 6,000 10,800 21,960 500 400 2,280 2,800 400 833 1,500 350 1,000 500 195 29,515 ADJUSTED TRIAL BALANCE DR CR 2,440 5,180 50 3,167 2,100 720 6,000 6,980 - 6,110 310 6,600 1,163 29,515 21,663 21,663 400 6,110 310 2,280 9,400 400 833 1,500 350 2,163 500 195 48,738 48,738 COST. EQUIPMENT-PURCHASE PRICE FIXTURES-PURCHASE PRICE DISPLAY CASES-PURCHASE PRICE SHIPPING COSTS INSTALLATION COSTS LESS DISPOSAL PROCEEDS 6,000 1,600 4,800 200 500 13,100 (120) 12,980 PART THREE QUANTATIVE ANALYSIS OF ALTERNATIVE INVENTRORY METHODS. Inventory comprises on of the most important and expensive assets in many companies. Good inventory costing mechanisms crucial in the success of any business. USGAAP requires that inventory to be valued at lower of cost to market. The choice of the valuation method that is used affects what is reported on the financial statements of a company. The choice of inventory valuation however should be motivated by the matching principle. The following methods can be used I the valuation of inventory. Average Cost This method considers all units as a whole and involves averaging the units' total costs (shipping/ freight charges, purchase costs). The method leads to large carrying amount of inventory. First in, first out FIFO). The method requires that the units that are bought first be assumed to be sold first hence remaining with the most recent goods to be bought in the closing inventory. This method has the advantage of reflecting recent costs of the inventory balance in the financial statements. Last in, first out (LIFO). The method requires that the units that are bought last be assumed to be sold first leading to old inventory balances in the balance sheet. PART FOUR. QUANTITATIVE ANALYSIS OF ACQUISITION AND ALTERNATIVE DEPRECIATION METHODS. The cost for the Equipment, Fixtures and Display cases comprises the purchase price, the amount that was spent to bring the assets to their current physical locations and state. These costs include shipping costs and installation costs of the fixtures. The cost components of the equipments, fixtures and display cases include: COST. EQUIPMENT-PURCHASE PRICE 6,000 FIXTURES-PURCHASE PRICE 1,600 DISPLAY CASES-PURCHASE PRICE 4,800 SHIPPING COSTS 200 INSTALLATION COSTS 500 13,100 LESS DISPOSAL PROCEEDS (120) 12,980 DEPRECIATION METHODS. Depreciation refers to the reduction in the value of an asset with the passage of time. Various methods of depreciating assets are allowed by GAAP. Straight line method. This is the simplest and most common method of computing deprecation. Using this method, Accounting professionals divide the estimated useful life of an asset less the estimated salvage value by its useful life. Other common depreciation methods include: Declining balance- This method of depreciation allocates more depreciation expense in the earlier years of the asset. Sum of the years digits- The method involves adding all the years of the fixed assets expected useful life and factoring in which year of the company is currently in as compared to the total number of years. PART SIX NOTES TO THE FINANCIAL STATEMENTS. For the period ending 31st December 2016. These notes form an integral part of these financial statements comprising the Income Statement, Statement of changes in equity, Statement of financial position and the cash flow statement. 1. General information. The principal activities of the company is to sell bicycles. 2. Basis of preparation. The accounts are prepared under the historical cost convention and in accordance with the GAAP. 3. Revenue recognition. Sales comprise the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the company's activities. The company recognizes revenue when the amount of revenue and related cost can be reliably measured. (a). Sale of Bicycles. Sales revenue from the sale of Bicycles is recognized by the company once customers accepts that the Bicycle is in a good condition and an invoice has been raised to a customer. (b). Rendering of tune-up service. Tune-up revenue is recognized as soon as the service has been rendered to the customers. (c). Advance receipts. Deposits for goods are recognized as income once customers pay in advance for the goods. 4. Property, plant and equipment. Property, plant and equipment are initially recognized at cost and subsequently carried at cost less accumulated depreciation. The cost for the Equipment, Fixtures and Display cases comprises the purchase price, the amount that was spent to bring the assets to their current physical locations and state. These costs include shipping costs and installation costs of the fixtures. The cost components of the fixtures and display cases include: Depreciation has been calculated on a straight line basis using the assets useful lives. The useful life of the fixtures and display cases is 6 years. The subsequent fair value will be estimated by subtracting accumulated depreciation from the cost of the equipment's and fixtures. The choice of the depreciation was arrived at due to its simplicity and the ability to be applied to all long term assets. 5. Inventories. Inventories at the end of the period have been valued at the lower of their cost and the net realizable value. Cost has been determined using the First in First out method because of its advantage to reflect the most recent value in the statement of financial position. The Net realizable has been estimated using the selling price of the bicycles in the ordinary course of business in the company less the estimated costs of storage. GENERAL LEDGER Date 2016 CASH No. 101 Explanation Ref Debit Credit Balance RUNNING FIXTURES AND 15Aug15 J1 CAASE PURCHASE OF 20Aug16 J2 BIKES PURCHASES OF 2Sep16 J3 BIKES 4Sep16 SOLD IN CASH J4 SALARIES 1Oct16 J6 AND WAGES 5Oct16 SOLD IN CASH J7 TUNE UP 30Sep16 J8 REVENUE 30Oct16 CASH J9 SALARIES 1Nov16 J10 AND WAGES SERVICE 30Nov16 J11 INCOME SALARIES 1Dec16 J12 AND WAGES RETURN 2Dec16 J13 INWARDS 15Dec16 SOLD IN CASH J14 ADVANCE 19Dec16 J15 PAYMENT RECEIVED DIVIDENDS 30Dec16 J16 PAID TUNE UP 30Dec16 J17 REVENUE 0 6980 1,020 2,220 2,150 1,650 3,870 800 6980 8000 (10,220) (8,070) (9,720) (5,850) (5,050) (4,610) 440 1650 120 (6,260) (6,140) 1650 310 5,720 (7,790) (8,100) (2,380) 400 (1,980) 500 40 (2,480) (2,440) ACCOUNTS RECEIVABLE No. 102 Date 2016 Explanation Ref Debit Credit Balance STORE SUPPLIES No. 103 Date 2016 Explanation Ref Debit Credit RUNNING EXPENSE CLOSING Date 2016 Balance 0 PREPAID RENT No. 104 Explanation Ref Debit Credit Balance RUNNING BALANCE CLOSING 0 PREPAID INSURANCE No. 105 Date 2016 Explanation RUNNING CLOSING Ref Debit Credit Balance 0 INVENTORY - STANDARD BIKES No. 110 Date 2016 Explanation Ref Debit Credit Balance 0 INVENTORY - RACING BIKES No. 111 Date 2016 Explanation Ref Debit Credit Balance INVENTORY - CHILDREN'S BIKES No. 115 Date 2016 20Aug16 2Sep16 20Sep16 Date 2016 15AUG215 Explanation Ref PURCHASED IN J2 CASH CASH J3 PURCHASE PURCHASED J5 ON CREDIT Debit 1,020 2,220 2,870 Credit Balance 1,020 3,240 6,110 FIXTURES No. 120 Explanation Ref Debit Credit Balance CASH PURCHASE CLOSING J1 6980 6980 ACCUMULATED DEPRECIATION No. 122 Date 2016 Explanation 31Oct16 Ref Debit ACCU,ULATED DEPRECIATION Credit 1163.33333 Balance 1163.333 ACCOUNTS PAYABLE No. 201 Date 2016 20Sep16 Explanation PURCHASED ON CREDIT Ref Debit J5 Credit 2870 Balance 2870 UNEARNED SERVICE REVENUE No. 202 Date 2016 Date 2016 31Dec16 Explanation Ref Debit Credit Balance WAGES PAYABLE No. 203 Explanation Ref Debit Credit Balance SALARIES AND WAGES J18 1650 1650 TAXES PAYABLE No. 205 Explanation Ref Debit Credit Balance Date 2016 INTEREST PAYABLE No. 210 Explanation Ref Debit Credit Balance Date 2016 0 NOTES PAYABLE No. 220 Explanation Ref Debit Credit Balance Date 2016 RUNNING BALANCE 0 CAPITAL STOCK No. 301 Date 2016 Explanation Ref Debit Credit Balance RUNNING 0 RETAINED EARNINGS No. 310 Explanation Ref Debit Credit Balance Date 2016 DIVIDENDS DECLARED No. 320 Date 2016 30Dec16 Date 2016 4Sep16 5Oct16 15Dec16 Explanation DIVIDENDS PAID Ref J16 Debit Credit Balance 500 500 SALES REVENUE No. 401 Explanation Ref Debit Credit Balance SOLD IN CASH J4 SOLD IN CASH J7 CASH J14 2,150 2,150 3,870 6,020 5720 11,740 SERVICE REVENUE No. 410 Date 2016 30Sep16 30Oct16 30Nov16 30Dec16 Explanation TUNE UP REVENUE CASH SERVICE INCOME SERVICE INCOME Ref Debit Credit Balance J8 800 J9 440 J11 120 J17 40 800 1240 1360 1400 COST OF GOODS SOLD No. 500 Date 2016 Explanation Ref Debit Credit Balance COST OF BIKE SUPPLIES No. 505 Date 2016 Explanation Ref Debit Credit Balance WAGE EXPENSE No. 511 Date 2016 1Oct16 1Nov16 1Dec16 31Dec16 Date 2016 Date 2016 Explanation Ref PAID SALARIES IN J6 CASH J10 SALARIES J12 AND WAGES SALARIES J18 AND WAGES Debit 1,650 1650 1,650 1,650 Credit Balance 1,650 3,300 4,950 6,600 UTILITIES EXPENSE No. 512 Explanation Ref Debit Credit Balance SELLING EXPENSE No. 513 Explanation Ref Debit Credit Balance ADMINISTRATIVE EXPENSE No. 514 Date 2016 Date 2016 Explanation Ref Debit Credit Balance RENT EXPENSE No. 515 Explanation Ref Debit Credit Balance RUNNING EXPENSE INSURANCE EXPENSE No. 516 Date 2016 Explanation Ref Debit Credit Balance RUNNING EXPENSE Date 2016 STORE SUPPLIES EXPENSE No. 517 Explanation Ref Debit Credit Balance DEPRECIATION EXPENSE No. 520 Date Explanation 2016 31Oct15 DEPRECIATION Ref Debit Credit 1,163 Balance 1,163 INTEREST EXPENSE No. 530 Date 2016 Explanation Ref Debit Credit RUNNING EXPENSE Date 2016 Balance 0 TAX EXPENSE No. 601 Explanation Ref Debit Credit Balance RUNNING EXPENSE 0 INCOME SUMMARY No. 601 Date 2016 Explanation Ref Debit Credit Balance Date 2016 2Dec16 Date 2016 RETURN INWARDS No. 602 Explanation Ref Debit Credit Balance STANDARD BIKE RETURNED J13 310 310 EQUIPMENT No. 603 Explanation Ref Debit Credit Balance RUNNING BALANCE Date 2016 ADVANCE RECEIPTS No. 604 Explanation Ref Debit Credit Balance CASH RECEIVED IN ADVANCE 400 400 NOTES TO THE ACCOUNTS. The principle accounting policies adopted in the preparation of this finanial statements are set out below. 1. Basis of prepartion. The accounts are prepared under the historical cost convention and in compliance with International Accounting Standards. 2. Inventories. Inventories are stated at the lower of cost and net realizable value.Cost is determined on direct purchase value and all the cost attributed to bringing the inventory to its current location and condition. Net realizable value is the estimate of the selling price in the ordinary course of the business, less the selling expenses. Perpetual inventory system has been used by the company.Purchase are recognised as soon as they are made. 3. Property and equipments. Depreciation has been calculated on a straight line basis using the assets useful lifes. The useful lifes of the fixtures and display cases is 6 years. 4.Share Capital. The company has fully paid share capital of 10800 dollars. 5. Currency. All balances in the financial statements are in US Dollars. 6. Revenue Recognition. Revenue is recognized as soon as a sale is made or an advance payment has been made. Broad Street Bike Company Unadjusted Trial Balance At December 31, 2016 Account CASH ACCOUNTS RECEI STORE SUPLIES PREPAID RENT PREPAID INSURAN INVENTORY STAND EQUIPMENT FIXTURES AND DIS Debit 7,620 50 3,167 2,100 720 6,000 ACCUMULATED DEPRECIATION SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS ADVANCE RECIEPTS PURCHASES RETURN INWARDS COST OF GOODS WAGES EXPENSE UTILITIES EXPENS RENT EXPENSE INSURANCE EXPE OFFICE SUPPLIES DEPRECIATION EX INTEREST EXPENS TAX EXPENSE Credit 1,000 100 700 195 500 6,000 10,800 10,220 - 2,280 2,800 400 833 1,500 350 1,000 500 195 29,515 29,515 Broad Street Bike Company Adjusted Trial Balance At December 31, 2016 Account Debit Credit 5,180 CASH ACCOUNTS RECEIVABLE 50 STORE SUPLIES 3,167 PREPAID RENT 2,100 PREPAID INSURANCE 720 INVENTORY STANDARD BIKES 6,000 EQUIPMENT 6,980 FIXTURES AND DISPLAY 2,163 1,400 2,970 2,350 195 500 6,000 10,800 21,960 ACCUMULATED DEPRECIATION SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS 500 400 ADVANCE RECIEPTS PURCHASES RETURN INWARDS COST OF GOODS SOLD WAGES EXPENSE UTILITIES EXPENSE RENT EXPENSE INSURANCE EXPENSE OFFICE SUPPLIES DEPRECIATION EXPENSE INTEREST EXPENSE TAX EXPENSE 6,110 310 2,280 9,400 400 833 1,500 350 2,163 500 195 48,738 48,738 Broad Street Bike Company Statement of Income For the period ended December 31, 2016 Revenues; SALES REVENUE SERVICE REVENUE ADVANCE RECIEPTS 21960 1400 400 23760 Expenses: 6110 310 RETURN INWARDS 2280 COST OF GOODS SOLD 9400 WAGES EXPENSE 400 UTILITIES EXPENSE 833 RENT EXPENSE 1500 INSURANCE EXPENSE 350 OFFICE SUPPLIES DEPRECIATION EXPENSE 2163.3 500 (23,846.33) INTEREST EXPENSE PURCHASES PROFIT BEFORE TAX TAXATION Net Income (86.33) (195.00) (281.33) Broad Street Bike Company Balance Sheet As of December 31, 2016 ASSETS: CURRENT ASSETS CASH ACCOUNTS RECEIVABLE 5,180 - STORE SUPLIES 50 PREPAID RENT 3,167 PREPAID INSURANCE 2,100 INVENTORY STANDARD BIKES 720 NON CURRENT ASSETS EQUIPMENT 6,000 FIXTURES 6,980 DEPRECIATION (2,163) 11,217 10,817 22,034 TOTAL ASSETS LIABILITIES AND EQUITY: CURRENT LIABLITIES ACCOUNTS PAYABLE 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABLE 500 6,015 6,000 6,000 NON CURRENT LIABILITIES NOTES PAYABLE Total liabilities 12,015 Equity: CHANGES IN EQUITY Total Equity 10,019 TOTAL LIABILITIES AND EQUITY 22,034 Broad Street Bike Company Statement of Changes in Stockholders' Equity For the year ended December 31, 2016 Balance, Beginning Share issue PROFIT DURING THE YEAR DIVIDENDS PAID Retaine Capital d Stock Earning s ### ### - Total Equity ### - ### (281.33) - ### (500.00) b7 now b8-is the share capital that was issued during d7 now d8 is the same value of share capital that has b d12-is the summation of the d 7 to d12 column. Balance, December 31 ### ### ### Note:there was no balance of capital stock and retaine operations begun in the middle of the year. Row seven re capital that was issued during the year for the company to commence business e value of share capital that has been taken from b8 n of the d 7 to d12 column. alance of capital stock and retained earnings at the beginning of the year because the middle of the year. Row seven thus should be left blank. Broad Street Bike Company Statement of Cash Flows For the period ended December 31, 2016 Operating Activities: REPORTED LOSS ADD BACK DEPRECIATION INREASE IN ACCOUNT PAYABLE TAXATION INTEREST PAYABLE INCREASE IN INVENTORY INSURANCE PREPAYMENT RENT PREPAYMENT STORE SUPPLIES Cash flow from operating activities (281) 2,163 5,320 195 500 (720) (2,100) (3,167) (50) 1,860 Investing Activities: PURCHASE OF EQUIPMENT (12,980) Cash flow from investing activities (12,980) Financing Activities: DIVIDENDS PAID ISSUANCE OF COMMON STOCK ISSUANCE OF NOTES PAYABLE Cash flow from financing activities Change in cash for the year (500) 10,800 6,000 16,300 5,180 Beginning cash balance Ending cash balance 5,180 Broad Street Bike Company Post-Closing Trial Balance At December 31, 2016 Account CASH Debit Credit 5,180 STORE SUPPLIES 50 PREPAID RENT 3,167 PREPAID INSURANCE INVENTORY STANDARD BIKES EQUIPMENT FIXTURES AND DISPLAY 2,100 720 6,000 6,980 DEPRECIATION 2,163 ACCOUNTS PAYABLE 2,970 WAGES PAYABLE 2,350 TAXES PAYABLE 195 INTEREST PAYABLE 500 NOTES PAYABLE 6,000 CAPITAL STOCK 10,800 RETAINED EARNINGS Totals 781 24,978 24,978 UNADJUSTED TRIAL BALANCE ADJUSTMENTS DR CR DR CR CASH 7,620 ACCOUNTS STORE SUPL 50 PREPAID R 3,167 PREPAID I 2,100 INVENTORY 720 EQUIPMEN 6,000 FIXTURES AND DISPLAY 6,980 ACCUMULATED DEPREC SERVICE REVENUE ACCOUNTS PAYABLE WAGES PAYABLE TAXES PAYABLE INTEREST PAYABLE NOTES PAYABLE CAPITAL STOCK SALES REVENUE DIVIDENDS ADVANCE RECIEPTS PURCHASE RETURN I COST OF G WAGES EXP UTILITIES RENT EXPE INSURANCE OFFICE SUP DEPRECIAT INTEREST TAX EXPEN 1,000 100 700 195 500 6,000 10,800 10,220 - 1,163 1,400 2,870 1,650 11,740 500 2,163 1,400 2,970 2,350 195 500 6,000 10,800 21,960 500 400 2,280 2,800 400 833 1,500 350 1,000 500 195 29,515 ADJUSTED TRIAL BALANCE DR CR 2,440 5,180 50 3,167 2,100 720 6,000 6,980 - 6,110 310 6,600 1,163 29,515 21,663 21,663 400 6,110 310 2,280 9,400 400 833 1,500 350 2,163 500 195 48,738 48,738 PURCHASE PRICE FIXTURES DISPLAY CASES SHIPPING COSTS INSTALLATION CO LESS DISPOSAL P 1,600 4,800 200 500 7,100 (120) 6,980 Intermediate Accounting Accounting Cycle Project - Part 2 Updated Instructions (December 7, 2016) Deliverables Percent of Grade 20% Requirement Appropriate writing and communication. Explanation You will be graded on the writing in the footnotes to the financial statements in part 6 and in your memos in part 4 and 5. See writing rubric below. 2 . Analysis of transactions. Prepare journal entries for each transaction, post these to the ledgers, and prepare a trial balance. If you need to add accounts to the Chart of Accounts, you can. Journal entries for the new activity, including all adjusting journal entries for the new activity. Ledgers and a trial balance are also desirable, but not required. 10% 3 . Accounting for inventory: inventory cost flow methods. Determine possible alternatives and select a method. You may consider looking at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives. Quantitative analysis of alternative inventory methods. 15% 4 . Accounting for equipment: purchase price and subsequent measurement. Determine accounting for purchases made on August 15. You may consider looking at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives. Quantitative analysis of acquisition cost and alternative depreciation methods. 15% 5 . Discussion of effect of choices on the financial statements and justification of the choice made. Based on parts 3 and 4, present an analysis of the alternatives. Show and discuss financial statements effects of the alternative methods and estimates. Explain why you select Building on 3 and 4, quantitative analysis of effects of alternative methods on financial statements and financial statement ratios. 15% 1 . the alternative that you use in the financial statements. Examine the effects of the alternatives on common financial statement ratios of profitability, liquidity, and solvency. 6 . Preparation of financial statements and notes to the financial statements. From your adjusted trial balance, prepare the financial statements and footnotes. Be sure to include a \"Significant accounting policies\" footnote with policies for revenue recognition, inventory and property, plant and equipment policies. Also, include the more detailed footnotes on revenue recognition, inventory and property plant and equipment policies based on ASC disclosures and text. Your responses to parts 3 and 4 will determine the amounts reported. For inventory and depreciation, written justification of method selected. 25% Financial statements with notes. You should include at least four notes including notes on \"Significant accounting policies\Intermediate Accounting Accounting Cycle Project - Part 2 Updated Instructions (December 7, 2016) Deliverables Percent of Grade 20% Requirement Appropriate writing and communication. Explanation You will be graded on the writing in the footnotes to the financial statements in part 6 and in your memos in part 4 and 5. See writing rubric below. 2 . Analysis of transactions. Prepare journal entries for each transaction, post these to the ledgers, and prepare a trial balance. If you need to add accounts to the Chart of Accounts, you can. Journal entries for the new activity, including all adjusting journal entries for the new activity. Ledgers and a trial balance are also desirable, but not required. 10% 3 . Accounting for inventory: inventory cost flow methods. Determine possible alternatives and select a method. You may consider looking at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives. Quantitative analysis of alternative inventory methods. 15% 4 . Accounting for equipment: purchase price and subsequent measurement. Determine accounting for purchases made on August 15. You may consider looking at the Accounting Standards Codification (ASC) for guidance on accounting and alternatives. Quantitative analysis of acquisition cost and alternative depreciation methods. 15% 5 . Discussion of effect of choices on the financial statements and justification of the choice made. Based on parts 3 and 4, present an analysis of the alternatives. Show and discuss financial statements effects of the alternative methods and estimates. Explain why you select Building on 3 and 4, quantitative analysis of effects of alternative methods on financial statements and financial statement ratios. 15% 1 . the alternative that you use in the financial statements. Examine the effects of the alternatives on common financial statement ratios of profitability, liquidity, and solvency. 6 . Preparation of financial statements and notes to the financial statements. From your adjusted trial balance, prepare the financial statements and footnotes. Be sure to include a \"Significant accounting policies\" footnote with policies for revenue recognition, inventory and property, plant and equipment policies. Also, include the more detailed footnotes on revenue recognition, inventory and property plant and equipment policies based on ASC disclosures and text. Your responses to parts 3 and 4 will determine the amounts reported. For inventory and depreciation, written justification of method selected. 25% Financial statements with notes. You should include at least four notes including notes on \"Significant accounting policies\GENERAL LEDGER Date 2016 CASH No. 101 Explanation Ref Debit Credit Balance RUNNING FIXTURES AND 15Aug15 J1 CAASE PURCHASE OF 20Aug16 J2 BIKES PURCHASES OF 2Sep16 J3 BIKES 4Sep16 SOLD IN CASH J4 SALARIES 1Oct16 J6 AND WAGES 5Oct16 SOLD IN CASH J7 TUNE UP 30Sep16 J8 REVENUE 30Oct16 CASH J9 SALARIES 1Nov16 J10 AND WAGES SERVICE 30Nov16 J11 INCOME SALARIES 1Dec16 J12 AND WAGES RETURN 2Dec16 J13 INWARDS 15Dec16 SOLD IN CASH J14 ADVANCE 19Dec16 J15 PAYMENT RECEIVED DIVIDENDS 30Dec16 J16 PAID TUNE UP 30Dec16 J17 REVENUE 0